Accumulate Bharti Airtel; target of Rs 2090: Prabhudas Lilladher

Prabhudas Lilladher's research report on Bharti Airtel

Bharti reported consol EBITDA of Rs278bn (+41.3% YoY, +3.1% QoQ; PLe: Rs258bn, BBGe: Rs279.8bn). Adj PAT came in at Rs59.5bn (+73.3% YoY; -46.7% QoQ, PLe: Rs61bn, BBGe: Rs56.6bn). India mobile revenue stood at Rs274bn, +21.6% YoY and +2.9%QoQ with a stable EBITDA margin of 59.4%. ARPU improved marginally to Rs250 from Rs245 in previous quarter with a net subscriber addition of 1.2mn in Q1. Home services (fixed line + broadband) rev witnessed growth of 25.7% YoY and 7.6% QoQ. Digital services rev witnessed degrowth of 1.8% YoY and 0.2% QoQ. Airtel segment rev degrew 7.7% YoY and 4.9% QoQ. Africa rev grew 22.4% YoY and 7.4% QoQ.

Outlook

We remain optimistic on the India business and continue to maintain ‘Accumulate’ rating with a TP of Rs2,090 (earlier Rs2,148) based on 13x FY27 EV/EBITDA for India business and adding the value of its investments in Airtel Africa, Indus Towers and Bharti Hexacom.